UK economy grew beyond pre-pandemic size before Omicron hit

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The UK economy grew above its pre-pandemic levels for the first time in November, supported by growing momentum across all industries before the Omicron coronavirus variant hit the country.

Output rose 0.9 per cent between October and November, accelerating strongly from near-stagnation in the previous month, according to data from the Office for National Statistics. This was much higher than the 0.4 per cent forecast by economists polled by Reuters.

The increase took gross domestic output, or GDP, to 0.7 per cent above its level in February 2020, before the first Covid-19 restrictions, indicating that the economy had fully recovered the ground lost during the pandemic.

All industries grew strongly. The services sector, which accounts for about 80 per cent of the economy, expanded by 0.7 per cent, supported by a strong performance from the retail sector. Production rose more than expected by 1 per cent and construction rebounded by 3.5 per cent from the contraction in the previous month.

However, the data predates the surge in Covid-19 infections and self-isolation linked to the spread of the Omicron variant.

“November’s increase in GDP probably was reversed in December, as Omicron dealt a hefty blow to the consumer services sector,” said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

Grant Fitzner, ONS chief economist said: “The economy grew strongly in the month before Omicron struck with architects, retailers, couriers and accountants having a bumper month.”

He added that construction also recovered from several weak months as many raw materials became easier to obtain. 

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